OAO Russian Railways may buy the majority stake of PSA/Peugeot-Citroen for the Gefco trucking unit as it had made the highest offer, according to a union official. Two insiders said that the Russian company has expressed willingness to pay around 1 billion euros ($1.31 billion) to acquire 75% of Gefco.
Officials from PSA and Russian Railways haven’t commented on this report. When interviewed over the past month, Christian Lafaye, an FO union official at PSA, said that Russian Railways is the mostly likely to become this bid’s winner. He also said that a majority stake of Gefco and Peugeot would keep a minority stake.
Last February, PSA revealed its plans to sell assets, which include a Gefco stake, as the automaker attempts to reduce its debt.
To minimize costs, the French manufacturer is planning to cut 8,000 jobs and close the Aulnay factory on the outskirts of Paris. Florent Couvreur, an analyst at CM-CIC Securities, said that this is “good news” when it comes to value. This year, investors were issued 1 billion euros in new shares. To generate cash, it also sold a stake to General Motor. CM-CIC has a buy rating on Peugeot.
Gefco was given a value of around 1.4 billion euros, which the analyst considers to be a “fair value.” He shared that it had received rumors that private equity funds are offering half of the total.
This year, the stock at Europe's second-biggest carmaker fell by 33% this year, putting its value at 2.53 billion euros. Sources said that Russian Railways requires government approval for the purchase to take place. It was on August 30 that the 1 billion-euro offer by the railway was reported by Russian newspaper Kommersant.